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Working Paper #2009-10 – Short-Time Compensation as a Policy to Stabilize Employment
Department of Economics
University of Delaware
Working Paper #2009-10
Short-Time Compensation as a Policy to Stabilize Employment
Wayne Vroman and Vera Brusentsev
Short-time compensation (STC or work sharing) is a labor adjustment measure designed to reduce or eliminate reliance on layoffs when firms need to reduce hours worked. It spreads the reduction in hours among a wide pool of workers and provides partial unemployment compensation for the reduced hours. This paper examines STC with attention to experiences in Canada and Germany as well as the United States. It also suggests ways to increase STC use in the United States.
JEL Codes: J33, J38, J39
Keywords: Employment retention, Short-time compensation, Work-sharing, Wage compensation, Unemployment insurance, Workplace relations, Social sector reform.